Introduction
The last decade has been an unpredictable one for the global economy. From the Great Recession to Brexit, there have been many ups and downs for businesses. But it's not all doom and gloom; there are ways to make sure your small business thrives in these uncertain times. Here are five ways to keep your small business from being crippled by a recession:
Build a cash reserve.
You'll want to build a cash reserve to have the financial flexibility you need when things get tough. For example, if your clients are not paying on time or at all, or they cancel projects, how will you pay your employees? Having an adequate cash reserve will prevent this from happening and give you the ability to weather short-term economic downturns.
How much should I build my cash reserve?
There is no one answer for every business because it depends on many factors unique to each business. Most experts agree that a good rule of thumb is about 6 months of expenses (operating expenses including payroll) in case something happens that decreases sales such as changing customer tastes or buying patterns.
There are two main ways of building up your reserves:
Be strategic with your operational investments.
Be strategic with your operational investments.
It's important to invest in the right things, like marketing and sales initiatives that will bring more revenue, or technology that will save you money and increase efficiency. This helps you avoid wasting money on unnecessary items such as a new office chair when there are much more important matters at hand (like keeping your business afloat). When it comes time to make investments, think long-term: what can help keep business going through these hard times? Then act accordingly by investing in those things first.
Don’t take advice from people who aren't in a position to give it well—and don't take advice from anyone who doesn't value honesty above all else
Expand your market reach by going global.
Expand your market reach by going global.
Consider the competitive landscape, and identify opportunities to expand into new markets.
Consider what makes you unique and how you can use this to differentiate yourself in a crowded marketplace.
Take advantage of the internet as a platform for reaching a global customer base.
Explore new revenue streams.
Explore new markets. Look at the market you serve and find ways to reach more people in that market. For example, if you sell dog food, consider reaching cat owners or pet bird owners.
Explore new products and services. Is there a need for something no one else is offering? If so, consider looking into it!
Look for ways to serve existing customers better than the competition does (or could). For example: If your business provides web design services, maybe you could provide SEO consulting and social media management as part of your package; then when prospective clients come in looking for a website designer they might also want the extra services you offer—and pay more money because of those extras!
Invest in customer retention.
One of the best ways to ensure your business is recession-proof is by investing in customer retention.
It’s more cost effective than acquisition, and it’s an important long-term strategy that should be a priority for any small business owner.
Customer retention rates are one of the most important metrics for small businesses because they can determine how much profit you make as compared to other companies in your industry.
The most successful businesses are the ones that are resilient in the face of economic downturns.
In this post, we'll look at how you can weather the storm and come out stronger than ever. The most successful businesses are the ones that are resilient in the face of economic downturns.
These tips will help you ensure your small business doesn't get caught up in a recession:
Invest in your customers now by offering them discounts and rewards during lean times. You may need to offer free shipping or other incentives for people to buy from you if your sales have slowed down because of consumers' tight budgets during a recession or credit crunch. If you have loyal customers who have been with you for years, it's time for them to see what being loyal means for them as well!
Consider investing in new employees if there is room in your budget for additional staff members at this time; finding talented individuals who are looking for work could be an excellent way of building good relationships with potential new clients while also helping others find work opportunities they otherwise wouldn't be able to find without having connections within certain industries that wouldn't normally hire people out-of-state (like construction workers). Additionally, those new employees will become familiarized with how things operate inside their organization--and thus better prepared when times get tough again later on down the road (ehem...recession).
Conclusion
In conclusion, the best way to survive a recession is to be prepared for it. This means building up your cash reserves and keeping an eye on your operational investments in order to minimize their impact during hard times. You should also consider expanding your market reach by going global; exploring new revenue streams like cross-selling or upselling; and investing in customer retention through loyalty programs or discounts on future purchases.
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